Mobile Grabs Nearly One-Third Of Paid Search Clicks In The US, But Ad Spend Still Lags

Mobile continues to account for an increasing share of paid search traffic in the U.S. But advertisers are still paying much less for those clicks than they are for desktop traffic.

  • In the fourth quarter of 2013, smartphones and tablets combined for a 32% share of all paid search clicks, according to new data from Rimm-Kaufman Group (RKG).
  • Even so, advertisers still seem reticent to allocate more of their spending budgets into the mobile ad bucket. Mobile occupied about 25% of total U.S. ad spend. That’s up from just under 15% in the same quarter a year ago, but growth has not kept pace with the expansion in mobile’s share of paid search traffic.
  • Smartphone cost-per-click (CPC) fell 8% in the fourth quarter compared to the same period the year before.

What’s more, tablets utterly dominate spend. They accounted for 70% of the combined total mobile ad spend next to just 30% for smartphones.

What’s the explanation for this disparity? The growing prominence of mobile search on smartphones has opened up the floodgates for mobile paid search ad inventory, suppressing prices on smartphone search ads in the process.

Worryingly, smartphone CPCs are now operating at just 40% of the value of desktop CPCs, which is down from 60% before the transition to Google’s multi-device “enhanced campaigns,” in July 2013.

Google’s enhanced campaign changes were supposed to make Google’s search ads less device-specific. The thinking among paid search marketers was that these changes would boost bids and bid prices for smartphone search ads, because enhanced campaigns in effect push many advertisers on the mobile sidelines to bid on smartphone and tablet traffic. However, smartphone CPCs continue to plummet.

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